Bitcoin Strategy & Market Analysis - W4 January 2026

Bitcoin Strategy Core Components Regime (Main Filter) Bitcoin Index Market Phase

During the period 2026-01-19 to 2026-01-25, the market phase index not only failed to exit the transitional regime but actually deteriorated - values consistently remain substantially below the recovery threshold of 0.43, therefore the model does not register a reversal and interprets the state as a transition toward a more stressed configuration. Based on the week’s actual data, the dynamics were downward: after a relatively strong start (NUPL 0.394 on January 19), the market’s internal state quickly degraded - the metric declined to 0.379 (January 20), then broke into the 0.369-0.374 zone (January 21-25), with a minimum around 0.369 (January 21). This indicates compression of unrealized profit and growing internal pressure - the market is returning closer to a regime where any external deterioration easily pushes participants into stress/loss. Price confirms this picture: the week started around 92.9k (January 19) and ended around 88.9k (January 25). Against the backdrop of the falling index, this looks like declining quality of recovery - last week’s momentum has completely vanished, and the market has again settled within the weak zone. Week’s conclusion: structurally things became worse than the previous week - the metric reversed downward and settled in the 0.369-0.374 range, while price dropped below 90k. Until the index returns and holds above 0.43, the current configuration remains fragile and prone to further deterioration, where any negative trigger could accelerate the transition into a more pronounced bear regime.

Cycle Timing Bitcoin Halving Cycles

During the week of 2026-01-19 to 2026-01-25, the model remained in bearish macro regime (BEAR). Nearly the entire period, the market was in BEAR CORRECTION, confirmed by negative MVRV Z-score and negative 21/400 spread throughout the week. This means that medium-term momentum remains weak, and any stabilization is technical in nature and does not represent confirmed recovery. Breaking down the week by dynamics, it appeared as an acceleration of correction following a failed attempt to maintain recovery. Toward the end of the week, a formal shift to BEAR NEUTRAL emerged, but in substance this looks like a pause after the corrective impulse rather than recovery - the transition to NEUTRAL occurred against the backdrop of price stabilization around 88.8k, while key metrics for that day remain unconfirmed. The week’s outcome is logically described as BEAR CORRECTION -> (formally) BEAR NEUTRAL, but with an important caveat: most of the week passed in confident correction with deteriorating metrics relative to the start, and the final “NEUTRAL” currently reads as fragile stabilization without confirmation from MVRV Z and the 21/400 spread. The macro BEAR structure has not changed, and until MVRV Z returns to an area closer to zero and the 21/400 spread begins to consistently narrow in absolute terms, the market remains vulnerable - the current balance could quickly shift to a new wave of decline on any negative trigger.

Point Triggers 1. Bitcoin Advanced Net UTXO Supply Ratio

The week of 2026-01-19 to 2026-01-25 gave the opposite answer compared to the previous period: the metric did not hold “altitude” >0.50, but sharply broke structure and within a few days collapsed into the elevated risk zone. Net UTXO Supply Ratio started fairly confidently at 0.452 (Jan 19), but already the next day a rapid reversal downward occurred: the indicator crashed to 0.373 (Jan 20) and continued degrading all week - 0.328 (Jan 21), a brief attempt to hold around 0.339-0.355 (Jan 22-24), and then the final breakdown to the weekly minimum of 0.319 (Jan 25). In other words, the week passed not in consolidation, but in accelerated deterioration mode, where any local “bounces” were merely noise within a downward impulse. The week’s main conclusion: the metric fell below the critical corridor of 0.34-0.40, and closing at 0.319 is already a zone where the probability of continued weakness and testing of deeper levels increases if real demand does not appear. Key test for next week: can the metric return at least above 0.34 and then consolidate back into 0.38-0.40. Without this, the current movement remains not a correction but a structural breakdown, and the risk of further deterioration persists.

2. BTC Buy/Sell Index & Risk (v1.2.1)

During the week of 2026-01-19 to 2026-01-25, the key change in derivative flow again manifested at the SMA 7D level, but now in the bearish direction: the smoothed Buy/Sell Index SMA 7D reversed downward and moved into a consistently negative zone. This means the weekly balance of futures flow has switched to selling/risk-off mode. Despite a one-time positive spike in “raw” index values of 3.03 (Jan 23), the overall week’s structure remained negative: the daily Buy/Sell Index was in negative territory most of the time. In such a regime, rallies “hold” worse - any bounces more often become technical and are quickly extinguished, while decline receives support from derivative flow. At the level of longer-term inertia, the picture also deteriorated: SMA 30D remained negative and became more negative over the week - from -0.25 (Jan 19) to -3.80 (Jan 25). This is important: the market didn’t just catch short-term negativity, but began “pulling” weakness into a more persistent backdrop. The risk breakdown confirms the loss of balance. At the week’s start, Risk Buy % dominated (56-59% Jan 19-20), then the market shifted to Risk Sell % dominance mid-week (Jan 22-23: 53.6% and 60.6%), and by close returned to an almost symmetrical state around 50/50 (Jan 24-25). This looks like a transition from attempts to “buy the dip” to a phase where participants are reducing exposure, and then the market freezes in anticipation, but already at weaker levels. Week’s conclusion: derivative flow broke last week’s positive and shifted into a distinct negative SMA 7D regime, with simultaneous deterioration of SMA 30D. The key test for next week - can SMA 7D at least return to zero and hold above, otherwise the current configuration remains bearish: bounces will be vulnerable, and pressure on price will persist.

Strategy Status for the Week of Jan 19, 2026 - Jan 25, 2026

The week brought not continued improvement, but a sharp pullback and deterioration of internal structure. The “transitional regime” phase formally persisted (Index Market Phase still substantially below the recovery threshold of 0.43), but the main point - the direction of movement reversed back downward. The index started relatively stable (0.394 Jan 19), but already the next day rapid degradation began: 0.379 (Jan 20) and then consolidation in the weak zone 0.369-0.374 (Jan 21-25). This means unrealized profit is compressing again, and the market is returning to a regime of heightened sensitivity, where even minor negativity quickly pushes participants into stress. Cyclically, the macro context remains the same (Macro = BEAR), but the character of movement deteriorated again. Nearly the entire week passed in BEAR CORRECTION: negative MVRV Z-score and 21/400 spread confirm that medium-term momentum is weak and the market is unable to consolidate recovery. At week’s end, a formal transition to BEAR NEUTRAL appeared, but it looks like a pause after the decline rather than a reversal: as of January 25, key confirming values on metrics are absent, so “NEUTRAL” currently reads as a technical stop at lower levels, not as a regime change. The week’s main blow landed on the on-chain ownership structure: Net UTXO Supply Ratio broke last week’s positive. After starting at 0.452 (Jan 19), the metric crashed to 0.373 (Jan 20) and further degraded to 0.328 (Jan 21), with an attempt to hold around 0.339-0.355 (Jan 22-24) and final decline to 0.319 (Jan 25). This is critical in meaning: the market didn’t “consolidate altitude” but lost its foundation and dropped below the 0.34-0.40 corridor, meaning the probability of continued weakness and retesting deeper levels has sharply increased. Derivative flows confirmed the regime change: if a week earlier SMA 7D Buy/Sell Index was a “safety cushion,” now it became a source of pressure. SMA 7D reversed from positive to negative and deepened to -14.29 (Jan 25), while SMA 30D also deteriorated (from -0.25 to -3.80). This means the market has transitioned from a regime of buyer inflow in futures to a risk-off/selling mode, where bounces hold worse and decline receives support from derivative flow. Price synchronously confirmed the picture: the week started around $92.9k and closed around $88.9k, meaning the market not only “didn’t develop recovery” but lost the 90k level against the backdrop of deterioration in both on-chain and derivatives. Conclusion: the base scenario shifted from “constructive stabilization” back to a regime of deterioration and return to the stress zone. Of the three conditions for regime change that appeared fulfilled a week earlier, two are broken: On-chain exited the healthy zone - Net UTXO fell below 0.34-0.40. Derivative flow became persistently negative. Final confirmation (Index Market Phase > 0.43) remains absent. Key test for next week: will “foundation” return - Net UTXO above 0.34, then return to 0.38-0.40, and simultaneously SMA 7D Buy/Sell Index should at least rise to zero. Without this, the current configuration remains bearish: bounces will be technical, and the risk of continued pressure remains high.

BITCOIN DEEP RESEARCH

Bitcoin P/L Block Dashboard

Deep Analysis of the P/L Score Model for the Period Oct 06, 2025 - Jan 25, 2026

1) Distribution Picture: Market Spent Nearly the Entire Period in Extreme “Negative” State shares for the period: -3 (extremely low sentiment, <10th percentile): 75 days (67%) -2 (low sentiment, 10-30th percentile): 30 days (27%) Remaining states (-1, +1, +2, +3): 7 days (6%) Conclusion: since early October, the metric very quickly transitioned from “overheating” to the “capitulation” zone and spent most of the time precisely there. 2) Regime Timeline: Where the Structural Break Occurred I divided the period into “plateaus” (continuous segments). This yields 3 key acts: Act A. Peak and Reversal (Oct 06 - Oct 18, 2025) Oct 06: score = +3 (overheating) at price ~124.9k and pl_ratio_percentile_365d around 98%. Then over 10-12 days, score degrades: +2 -> +1 -> -2 -> -3. Already Oct 17-18, -3 appears at price ~106-107k. Meaning: the metric played out a “classic” top pattern - extreme positive is very brief, then rapid transition to stress. Act B. Extended Capitulation (Nov 03, 2025 - Jan 04, 2026) The most important plateau of the entire period: 63 consecutive days with score = -3. Price across this segment: ~106.5k -> ~91.4k (about -14% for the segment). PL Ratio Percentile 365d almost always <10, meaning the market was in a persistently “depressed” state by profit/loss of UTXO blocks. Meaning: this is not “one-time panic” but an extended weakness phase, when the market’s internal state fails to recover for a long time. Act C. Attempted Improvement and Repeated Failure (Jan 05 - Jan 25, 2026) Short “exhale” to -2 (Jan 05-07), then again -3 (Jan 08-11). Then 8 days with score = -2 (Jan 12-19): this coincides with local improvement and bounce. But already Jan 20-25 - return to -3, with Jan 25 recording the weakest percentile: PL Ratio Percentile 365d = 0 and the minimum PL Ratio for the period (~16.85). Meaning: the stabilization attempt occurred, but the internal structure didn’t consolidate - the market returned to the extremely weak zone, hitting a new “internal low” in PL Ratio. 3) What Score Says About the Market in Practice Relationship with “Environmental State” Average values by states: With score = -3: average drawdown from ATH: ~ -26.3% average 7d return: ~ -2.53% average 30d return: ~ -9.10% 7d Annualized volatility: ~38% With score = -2: average drawdown from ATH: ~ -16.2% average 7d return: around 0% average 30d return: around 0% The interpretation is simple: -2 in the data more often resembles “transition/pause,” while -3 resembles “sustained weakness” when the market holds recovery worse. In fact, this is a bear cycle, but the model itself doesn’t know this definition - though we understand what it means. 4) Summary as of Current Date (Jan 25, 2026) As of Jan 25, 2026: score = -3 PL Ratio Percentile 365d = 0 (weakness extreme in the yearly window) price around 88.3k, drawdown from ATH around -29% (per dataset) PL Momentum Score = -2 (strong negative momentum) This is a “weakness + accelerating weakness” configuration, not “weakness that’s stabilizing.” 5) What to Monitor Going Forward Minimum conditions to speak of real improvement rather than noise: Score exits -3 and holds at least at -2 for several consecutive days PL Momentum Score rises at least to 0 / +1 (stops being -2) PL Ratio Percentile 365d returns above 10

Valuation Band v2.1

Compared to early November, the model configuration we discussed on November 9 has changed dramatically in valuation direction, but not in signal type. In November, price was above Fair Value by +17.7% and traded in the upper part of the inner range, meaning the model was registering moderate overvaluation. By late January, the situation has mirrored: price has moved below Fair Value and consolidated at a discount (approximately -5…-10% at current values). The market has transitioned from “expensive” to “cheap, but still within normal.” We’re discussing fundamentals here, and if you scroll back to the report’s beginning and look at the price performance table, you’ll see the -15% year-over-year value - this illustrates well the scale of context change. The key point is that price still has not exceeded the inner bands, therefore the model does not confirm extreme undervaluation and does not give a BUY signal, but merely registers valuation compression relative to fair value. The second important change is the shift in market context. In November, we were discussing the final phase of the up-cycle; now we’re observing gradual collapse of the premium to fair against the backdrop of price weakness, characteristic of the transition from bull-distribution to bear-acceptance. Fair Value continues to grow due to network activity, but price is leading the way down and forming a discount. This means the model no longer warns of overheating risk as in November, but rather shows the opposite: the market has become fundamentally cheaper, but is not yet cheap enough to consider the current zone an asymmetric accumulation point.

SUMMARY

Final Conclusion

The week of January 19-25 became a breaking point for the stabilization attempt and returned the market to a structural deterioration regime. All key model layers - regime, on-chain, and derivative flow - synchronously confirmed weakening. Index Market Phase declined from 0.394 to the 0.369-0.374 range, remaining substantially below the recovery threshold of 0.43. Price lost the 90k level and closed around 88.9k, confirming degradation not only technically but also in the market’s internal state. The critical factor was the breakdown of accumulation structure on-chain. Net UTXO Supply Ratio fell from 0.452 to 0.319, dropping below the 0.34-0.40 corridor previously viewed as the base stability zone. This means the market has lost the ability to absorb supply at current levels. The derivative layer amplified the negative: SMA 7D Buy/Sell Index moved into a persistently negative zone (-14.29), while SMA 30D continued deteriorating (-3.80), indicating a risk-reduction regime and vulnerability of any recovery moves. At the same time, it’s important to distinguish between structural weakness and extreme valuation. By Adler Valuation Band, price trades at a 5-10% discount to Fair Value but remains inside the inner bands. The model confirms neither panic nor an asymmetric accumulation zone. The market has become fundamentally cheaper compared to November, but has not yet entered the statistical undervaluation area where historically strong medium-term entry points have formed. The base scenario for next week is continued pressure or sticky consolidation at reduced levels. For a regime change, we need to see foundation restoration: Net UTXO returning above 0.34 with movement toward 0.38-0.40, and SMA 7D Buy/Sell Index rising at least to zero. Until these conditions are met, any upward moves should be viewed as technical bounces within a bearish configuration, not as the beginning of sustainable recovery.